Morgan Stanley Upgrades Netflix (NFLX) to Overweight, 'removing some added uncertainty'
Morgan Stanley analyst Benjamin Swinburne upgraded Netflix (NASDAQ: NFLX) from Equalweight to Overweight with a price target of $475.00 (from $430.00).
The analyst comments "Our prior EW view was based on concerns that consensus expectations for Netflix's new growth drivers - paid sharing and advertising - were too high. This was implied both in consensus estimates and valuation. However, since hitting $475 when it reported 2Q results in July, both those estimates and valuation have come down. Sentiment around the advertising opportunity, in particular, have soured and uncertainty over an elevated investment cycle in '24 emerged. Against this rising anxiety and falling stock price, the business has been accelerating, the password crackdown is working, and the competition has pulled back. With 3Q results, Netflix has provided clear guidance for its content spending and margin expectations for '24, removing some added uncertainty. "
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Shares of Netflix closed at $346.19 yesterday.